As New CCB Report Deadline Looms, Industry Hopefuls React to Draft Licensing Fees
MONTPELIER — On Friday, the Vermont Cannabis Control Board provided a first glimpse at proposed license fees and structures for adult-use cannabis businesses, an exciting bit of news for industry hopefuls and others looking to participate in a legal Vermont market.
Earlier in the week, the Board had announced that it would need more time to deliver a much-anticipated key report on adult licensing fees to lawmakers. The regulatory board needs to recommend how many licenses should be issued, and how much those licenses will cost, and was slated to present that report to the legislature last Friday. The CCB has now announced that report will be made available on October 15.
It’s 10/1 – we’ve made no secret of it, but the CCB’s first report on a proposed license fee structure will not be delivered to the legislature today. We expect it will be ready in about two weeks. More info on our site:https://t.co/hgwdCjghBp#vtpoli
— vermontccb (@vermontccb) October 1, 2021
Though the official report was delayed, preliminary models and draft license fees were shared during Friday’s regular meeting of the full Control Board.
Members of the Board worked in cooperation with Colorado-based consulting firm VS Strategies to create a model that would assess the state’s overall demand for adult-use cannabis products. Currently, they estimate that Vermont will require around 400,000-500,000 square feet of total canopy to meet that demand.
VS Strategies partner Andrew Livingston of VS Strategies and CCB Commissioner James Pepper broke down various scenarios for cannabis production and demand, including ratios for indoor and outdoor cannabis.
The comprehensive model they presented estimates that 70-80% of the state’s cannabis would come from indoor cultivation.
The comprehensive model they presented estimates that 70-80% of the state’s cannabis would come from indoor cultivation. Livingston explained that the model would need to be flexible. The model also
acknowledges that there will be an annual shift in the price of cannabis each year, including summer price spikes (when demand rises, but outdoor is not yet harvested) and fall harvest season.
Discussion also arose around the size of cultivation areas based on ‘total canopy’ versus ‘flowering canopy.’ While total canopy is the current metric being used by the Board, cultivators and producers favor flowering canopy.
During the meeting, public comment seemed to indicate broad support for the definition of “flowering canopy” as the total metric. Questions were also asked about the per-pound prices used in Livingston’s model, capping the size of indoor cultivation at 20,000 square feet and adding an intermediate cultivation tier size above 1,000 square feet.
“I think we’ve gotten some strong feedback in regard to cultivation and cultivation tiers,” said Control Board member Julie Hulburd in a phone interview this week. She noted that most of the feedback they had gotten was related to cultivation.
The draft application fees were fairly straightforward – $500 for intent to apply and $1,000 for all application fees. Applicants who have submitted an intent to apply application will have their application fee reduced by the amount of their intent to apply fee ($500).
Cultivation license fees were divided into several indoor and outdoor tiers, ranging from $1,000 for a small cultivator outdoor license, to $200,000 for the largest indoor license.
“I’m concerned about the large range in fees,” said Bern Gallery owner Tito Bern on Tuesday. “But as long as they’re on the lower end and the term ‘canopy’ refers to ‘flowering canopy,’ then I think they’re reasonable.”
“I’m concerned about the large range in fees. But as long as they’re on the lower end and the term ‘canopy’ refers to ‘flowering canopy,’ then I think they’re reasonable.”
Tim Fair, a partner and attorney at Vermont Cannabis Solutions, said he would like an additional tier above the small cultivator license limit of 1,000 square feet. “I think there needs to be another indoor tier, maybe 2,500 square feet, priced a little bit more reasonably.” he said. “Once you get above 5,000 you can start jacking up the price.”
Fair also expressed concerns around annual licensing renewal fees. “Some of the proposed annual renewal fees are significantly higher than the license application fee,” he said.
“It’s not the licensing application, it’s the start up costs. What I don’t want to see is a ridiculous renewal fees on the back end that could very well put these businesses out of business … I would much rather see these numbers come from the integrated licensing.”
#ICYMI our market structure subcommittee adjourned last week after making their fee recommendations. Now it’s up to the Board to weigh those recs and report back to the legislature. Presentation available on our website:https://t.co/pnAJCicvSG
— vermontccb (@vermontccb) October 4, 2021
The next full meeting of the Vermont Cannabis Control board is tomorrow, October 8 at 11 a.m.
“We’ll make some decisions that I think will definitely inform that final report for October 15,” Hulburd said.
“The reports that we’re working on for October 15 and November 1 – those are big picture reports. Then we’re going to start drafting the actual rules.”
“The other thing to remember is that the piece we’re working on now is the big picture,” Hulburd said. “The reports that we’re working on for October 15 and November 1 – those are big picture reports. Then we’re going to start drafting the actual rules.” And then, she said, “We’re going to want [public] feedback on all of those details.”
Looking ahead to the next few weeks, the Board and its subcommittees will be working, among other things, on packaging requirements, categorizing consumables as food manufacturing vs food processing, specific benefits and technical assistance for social equity applicants, potency caps for flower and concentrates, and hemp-to-THC processing.
Get full details on the next Vermont CCB meeting on our events page.